SAAB no more

It is the end of the road for SAAB. As a Swede, it feels sad (and a bit scary) to see a part of our industrial heritage go down and end. It lasted a bit more than 60 years, but now the  manufacturing of cars called SAAB has ended for good. But to be quite honest, it is hard to see how things could have gone differently. The closing of SAAB cars must have been considered inevitable for the past ten years or more. There will be lots of finger-pointing in the coming weeks, with the opposition parties trying to smear this on the government. However, I don’t see what the government could have done other than possibly postpone the inevitable.

If you look at the facts, SAAB has very rarely made a profit. Apparently, the 1980’s were decent, but since GM took over in 1990, maybe there have been two profitable years. With that kind of history, it is hard to motivate why they should have been allowed to continue for this long in a market economy.

That said, the reason that SAAB is closing now is squarely and simply GM. General Motors has to be one of the worst-run companies in the business, and they have badly mauled and mistreated all their car brands except maybe Opel. SAAB was bought as European luxury brand for GM, which could have worked very well. If only the company had been given solid funding and a strategic direction, it could well have grown into a Lexus-Toyota pairing with Opel. Now, SAAB was never given the room to innovate and develop new products, instead it turned a steady draining loss each year. GM managed to do the worst possible: it didn’t invest in the brand to give it a fighting chance, but it also kept it going as a loss-making unit for almost twenty years. Overall, this long slow decline must have cost more money than a solid up-front investment back in 1990…

I guess in five years time, we will be seeing the real analysis of what happened, and this might be taught in business schools as a classic example of how not to manage car companies — or any brand, for that matter.